Opening Remarks: Manulife’s Annual Meeting of Shareholders

Good morning and welcome everyone, Mr. Chairman, policyholders and fellow shareholders. Thank you for joining us.

Normally I would be welcoming you at our global headquarters in Toronto. However, things still remain far from normal as we continue to navigate an unparalleled set of challenges resulting from the COVID-19 pandemic.

Before I say anything else, I want to send my deepest condolences to all of the families, friends and loved ones lost and impacted recently by the tragedy in Nova Scotia. Our thoughts and prayers are with all of you. 

I also want to express my deepest sympathies to everyone around the world who has been impacted by COVID-19. Some have family members and friends who have taken ill. Others have lost jobs or income or are suffering from social isolation.

All of us have had to cope with distressing and difficult circumstances that have changed our daily lives and have been forced to adapt to a world that is dramatically different from what we’ve been used to.

Throughout the pandemic, our top priority has been the health and safety of our team, our customers and our partners.

It’s been nothing short of amazing to see the Manulife team rally at this incredibly difficult time for our customers.

Let me give you just a few examples of how the team has stepped up at this time of great need:

• In many parts of Asia, we quickly offered additional COVID-19-related health and death benefits, expedited claims, and extensions on policy renewal and payment deadlines.      
• In parts of North America, we are helping our small and medium-size Group Benefits customers, by deferring renewal increases and offering rebates on dental and health premiums.
• We’re also offering deferrals on mortgage payments and credit card obligations for those affected by the economic impacts of the outbreak.
• And when international borders started closing and the Canadian Government asked Canadians to return home, we knew we had an opportunity to do the right thing, so we extended out-of-country health coverage for customers who were overseas and unable to return home quickly.

We’ve also been focused on helping the communities in which we operate, by making donations – both monetary and of medical supplies and resources – to some of the hardest hit areas.

It’s important to remember that our history stretches more than one hundred and fifty-five years. We’ve stayed open for business through World Wars and natural disasters. We help people in tough times and we deliver on our promises. We are again ready to take up that responsibility today.

Indeed, we are already hearing from the front lines about the difference we are making in our customers’ lives during this unprecedented time. This underscores the vital role our industry plays, and will continue to play, as we help customers plan, prepare and protect what matters most.

Recently, one of our customers reached out to apply for a compassionate assistance loan. She was already coping with a severe illness. Now, her already difficult situation was becoming even harder with her husband out of work because of the COVID-19 pandemic. Knowing this customer’s urgent need, we expedited processes and funds were advanced the same day.

Responding quickly and moving with speed to lighten the load for our customers – that’s what defines our mission. Those six simple words, “Decisions made easier. Lives made better,” drive our 35,000 colleagues and over 98,000 agents every day. They define what it means to be a caring, trustworthy, values-driven organization that does what it says and delivers on its promises.

We, like many other global companies, are looking across our operations around the world to determine the best path to getting staff back in the office.

In China, Manulife is already at nearly 80% in office, and in Hong Kong, we’re nearly at 50%. We’ve learned some great lessons from our operations in Asia, which was the first region of the world to enter the pandemic, and we are factoring them into our decision-making globally.

The impact on our operations was lessened because we have been transforming our business for over two years, and our digital capabilities and business continuity plans allowed us to maintain much of our operations, and continue serving our customers remotely.

Even so, any discussions about re-opening the broader economy are highly complex and difficult. Success has to balance getting the economy back to near-full capacity as quickly as possible, without putting people and communities at increased risk.

Fiscal stimulus in Canada and the U.S. has been helpful to date - and globally, government and central bank actions leveraging both fiscal and monetary measures have been strong.

To quote Bank of Canada Governor Stephen Poloz, “A firefighter has never been criticized for using too much water.” I believe this is the right philosophy.

Regardless, it’s impossible to avoid a simple fact: reopening will have to take place on a localized basis and must take into account the need to protect human health and ensure the safety and wellbeing of as many people as possible - above every other concern.

At present, the world needs to see a dramatic increase in the amount of testing and contact tracing, in addition to progress with respect to the development of treatments and a vaccine, before the economy can safely return to some semblance of normalcy.

While this needs to be approached with great urgency, this process will take time and very careful planning. We simply cannot afford to get this wrong because subsequent pandemic waves could create even greater economic and social devastation than we’ve already seen.

Manulife entered this crisis from a position of strength and I’m confident we will emerge from this pandemic strong, united and ready to serve our customers as they begin to resume their regular lives.

Over the past decade, we have significantly de-risked our business and reduced our company’s sensitivity to market movements. For instance, our sensitivity to a fifty-basis-point parallel shift in interest rates is one tenth of what it was in 2009. And, our sensitivity to equity markets is less than half of what it was in 2009.

We have put sophisticated hedging programs in place and, as you have seen in recent years, they have performed in-line with expectations. And our capital position is strong, as demonstrated by our LICAT ratio of 140% at the end of 2019, and of 155% at the end of Q1 2020.  

We also achieved our medium-term leverage target of 25% in January, after taking into account a $500 million debt redemption. We enjoy a steady stream of premium revenues in our insurance business, regardless of the sales generated in any given quarter, which further positions us strongly to weather the current situation.

I am confident we are well positioned to navigate this crisis, and I am proud of how our team has responded, stepping up to show we are truly here for each other, our customers, and our communities.

Now let me give you a sense of our strategic progress over the course of 2019.

As you know, over the past two and half years we have been focused on our five strategic priorities. We continue to consistently execute against each of them as we transform Manulife into the most digital, customer-centric global company in our industry.

As of the fourth quarter of 2019, we released a total of $5.1 billion of capital, achieving our 2022 portfolio optimization target three years ahead of schedule.

We delivered expense efficiencies of $700 million by the end of 2019, and are on track to deliver on our 2022, $1 billion target, ahead of schedule. Expense growth has also slowed significantly, from 7% to 9% in the past, down to roughly 3% more recently, giving us additional flexibility to respond to the COVID-19 pandemic.

We continue to make headway on growing our highest-potential businesses. They generated 57% of our core earnings in 2019, up from 54% in 2017. And their core earnings growth outpaced our other businesses by 11 percentage points in 2019 from 2018.

We’ve broadened their geographic reach and increased their future growth potential.

For example, in our Global Wealth and Asset Management business, we entered into a joint venture agreement with Mahindra Finance in India, with the goal of becoming a premier provider of retail investment solutions in that country.

We are also keeping our focus on becoming a digital, customer-centric, market leader. We served nearly 30 million customers in 2019 as we continued to develop and provide new and compelling ways to meet their needs.

A great example is the expansion of our behavioural insurance offerings, Manulife Vitality, John Hancock Vitality, and ManulifeMOVE. These products embody our focus on making lives better as they reward our customers for healthy habits, like exercising and eating well.

In Asia, we introduced ManulifeMOVE in Vietnam and Cambodia, and doubled enrollment across the region.

And we launched an industry-first, voice-enabled retirement product using Alexa for customers in the U.S.

We also made steady progress in how we are supporting our customers. In Canada, we saw 3.9 million more claims submitted digitally, and with our Group Benefits business also moving to paperless claims, we are on track to eliminate 4.2 million cheques and benefits statements.

In Asia, we launched Hong Kong’s first all-digital cashless service, which enables customers to obtain speedy pre-approval for most common claims, and we expanded our eClaims platform across the region.

At Manulife, we have an ambitious goal to improve our Net Promoter Scores (NPS) by 30 points across the company by 2022, knowing that passionate customers are more likely to recommend and stay with us.

In 2019, we were pleased to see our NPS score up 7 points from the baseline levels established in 2017, and we continue enhancing our customer experience using human-centred design and technology.

Our last strategic priority is building a winning team and culture. As part of that effort, we’ve been challenging ourselves to bring an insurgent mindset to all we do. Instead of asking, “Does this process, product, or policy work for our customers?” at Manulife we ask, “Is there a better way?”.

This approach is encouraging all of us to look for ways to continuously improve what we do, and we’re investing in helping our colleagues build new skills and capabilities.

Our future-focused approach is resonating with our teams, as we saw increased engagement across the company last year, also driven by our commitment to actively cultivate a diverse and inclusive workplace. I firmly believe that our people, and the teams we’re building, will continue to be a competitive advantage for us globally.

Turning to our communities, it’s clear that the COVID-19 pandemic has reinforced the importance of every individual and organization being united and working together for the greater good of humanity. And our community commitment goes beyond supporting those affected by the pandemic.

For example, there is no denying the impact of climate change and its implications for every community and business globally.

To address this, we established a climate change working group that reports to our Executive Sustainability Council, whose mandate includes identifying climate change risks and opportunities across the organization.

We are also proud to serve as a leading financing partner for the renewable power sector in North America and we’re also sustainably managing our real estate, timber, and agriculture assets. For example, over 48 million square feet, or 80%, of our global real estate portfolio has been certified to a green building standard.

We’re proud of the work we have done globally in support of important community needs, directly making or helping to raise over $46 million in community contributions, along with our employees and agents sharing their humanity by volunteering about 66,000 hours of service.

Despite significant market volatility, global trade tensions, and other geopolitical events throughout 2019, we continued to sustainably grow net income and core earnings.

We delivered top-quartile shareholder returns in 2019.

We achieved core earnings of $6 billion and net income attributed to shareholders of $5.6 billion, up 5% and 14%, respectively, over 2018.

Our strong results were driven by continued double-digit growth in core earnings in Asia.

New business value, at $2 billion, was up 15% from 2018.

Thanks to the ongoing trust and confidence of our customers around the world, our assets continued to grow, finishing the year at $1.2 trillion of assets under management and administration.

This was up 13% from last year and up almost 30% from five years ago.

One of our Values, “Get it done together,” is an apt description for how we have been able to accomplish so much in 2019 – and how we continue to deliver in the face of the COVID-19 pandemic.

I want to extend a special thank you to our Chairman, John Cassaday, for his continued dedication, candor, and sound advice.

And I would like to thank the rest of the Board for their counsel and support, and you, fellow shareholders, for your ongoing trust and confidence in Manulife and our team.

Looking ahead, we are excited to build on our momentum. As the current crisis shows, we must always be ready to rise to the challenge and address circumstances outside our control.

Companies will be defined by how well they looked after their teams and customers during this crisis, and I am incredibly proud of our story on that front.  

Driven by our mission, values, and culture, we are getting through this together.

We remain confident that we have the right plan, the right team, and the right mindset to achieve our ambition.

Thank you.